Knowledge management software

Transcription

1 35 Knowledge management software A selection process James A. Albers and Amanda L. Trinidad In the last several years, there has been an explosive growth in knowledge management (KM) software. Selecting KM software, especially for small to medium-size firms, becomes a challenging and formidable task due to the growing number of products, difficulty in differentiating product offerings, rapid changes in technology, and economic conditions. This paper provides a detailed discussion on the software selection process. In addition, it provides a case study of a company selecting KM software. Dr. James A. Albers Faculty Fellow, Technology & Innovation Management Pacific Lutheran University School of Business Tacoma WA 98447, USA Tel: (+253) Fax: (+253) albersja@plu.edu Ms. Amanda L. Trinidad MBA Technology & Innovation Management NE, 63rd Way # 302 Redmond, Washington 98052, USA atrinidad@covad.net Introduction Knowledge management is the systematic process of creating, maintaining and nurturing an organization, to make the best use of knowledge to achieve sustainable competitive advantage and high performance. KM provides an opportunity for achieving substantial savings, significant improvements in human performance, and enhanced competitiveness. KM is multidisciplinary by nature and integrates concepts used in strategic management, organization theory, and information systems management. It stresses a formalized, integrated approach to managing an enterprise s intangible information assets. Major enablers of KM include organizational mechanisms, information technologies and software. In the last several years, there has been an explosive growth in the availability of KM software. Market analysis predicts $ 5.4 billion in worldwide KM software sales in A plethora of vendors have jumped into this business, sometimes making outrageous claims about performance and instant KM. Most companies with tight budgets require strong return on investment for KM software. For many companies selecting KM software becomes a challenging and formidable task. There is a broad range of categories of KM technologies and software. 2, 3 Examples of KM software include: content management/document management, collaborative tools, business intelligence, databases and repositories, knowledge directories/categorization, portals, expert search, and data mining. It is critical that companies use a systematic process for software selection, due to the many types of software and the need to integrate with existing systems. TECH MONITOR l Jan-Feb

2 36 Figure 1: Software selection process Figure 2: Strategic gap analysis 13 Establish business need must know Strategy knowledge link must do Form search team Knowledge gap Strategy gap Perform infrastructure assessment Determine software requirements and sources knows Knowledge strategy link can do Prepare request for proposal and host bidder's conference Create vendor scripts and view vendor demonstrations Establish criteria for selection process Make final selection There have been a number of papers that discuss selecting KM technologies 4,5 as well as papers that describe the process for selecting information systems software, but few, if any, are directed at KM software. 6, 7 There are also references that discuss software selection from an information systems perspective. 8, 9, 10, 11 This paper discusses in detail the KM software selection process, which includes business need, search team, infrastructure assessment, software requirements and sources, request for proposal and bidder s conference, vendor script and vendor demonstrations, criteria for selection, and final decision. To illustrate the application of the process, a case study of software selection and implementation is discussed. Knowledge management implementation process The following framework for implementing knowledge management outlines nine steps to implement a KM programme in an organization. 12 These nine steps are: 1. Strategic assessment - Where is the organization going? 2. Knowledge audit - What do we know? 3. Aligning knowledge strategy with business strategy - What do we need to know? 4. Selection of the knowledge management team - Who are the key players? 5. nformation technology assessment - What is our existing information technology infrastructure? 6. Information technology change management strategy - What changes do we need in the information technology infrastructure? 7. Organization change management strategies - What changes do we need in the organization? 8. Deployment of knowledge management systems - How do we roll out the knowledge management systems? 9. Measurement systems - What measurements do we take? This framework can be used in developing the KM software selection process which is a subset of the overall KM process. Software selection process The software selection process (Figure 1) consists of the following steps: establishing the business needs, forming the search team, performing the infrastructure assessment, determining software requirements and sources, preparing the request for proposal and hosting bidder s conference, creating the vendor scripts and viewing vendor demonstrations, establishing criteria for selection, and making the final decision. Each of these steps is discussed in detail in Figure 1. Business need The primary objective of any corporate KM programme is to support the achievement of strategic business objectives. Every firm needs a clear understanding of where the organization is going and should take specific actions to drive the organization in its chosen direction. Once the strategic direction is determined, it can be used to determine the strategic business objectives and to align the KM strategy. The KM strategy determines the knowledge management objectives. The KM strategy needs to address the knowledge gaps in order to accomplish the business strategy. The knowledge gaps and strategic gaps of the organization can be addressed by using the strategic gap analysis (Figure 2). The knowledge gaps are determined by performing a knowledge audit. A successful knowledge audit accomplishes several things. It provides an overview of the strengths and weaknesses of the organization, offers analysis of the organization s potential for competitive advantage, and uncovers the benchmarks of successful knowledge management within the organization. The knowledge audit identifies what knowledge exists in the organization and what knowledge is needed to support the business strategy. The audit identifies what information really matters and what are knowledge leverage points in a firm s performance. 36 TECH MONITOR l Jan-Feb 2004

3 37 The audit should identify decisions that the organization needs to make and what information supports those decisions. It should also classify the nature of knowledge needs, i.e. tacit or explicit knowledge. Tacit knowledge is personal knowledge imbedded in personal experiences, such as personal beliefs and values. Explicit knowledge is knowledge that can be articulated in formal language and can be codified and distributed. Knowledge audits are most useful in organizations that have a broad awareness of the potential of KM with the organization. This can be accomplished by examining the organization in five key areas: 14 l Current levels of knowledge usage and communication; l Current state of corporate knowledge management; l Identification and clarification of knowledge management opportunities; l Identification and clarification of potential problem areas; and l Perceived value of knowledge within the organization. One approach with a knowledge audit is to perform interviews or surveys across the organization to identify problems and issues related to knowledge processing in the organization. Before selecting the software, it is important to determine the right balance between codification and personalization strategy. 15 Codification strategy is more focused on technology that enables storage, indexing, retrieval, and reuse. With codification strategy, knowledge is codified and stored in databases, where it can be accessed and easily used by anyone in the company. Personalization strategy is more focused on connecting knowledge workers who want to share tacit knowledge through direct person-to-person contact. Some KM software is directed at codification strategy while others are directed at personalization strategy. Information technology must be combined with organizational mechanisms to promote knowledge sharing, integration, and production. Examples of organizational mechanisms used to promote knowledge management include organization policies and standards, on-the-job training, employee rotation across departments, mentoring, face-to-face meetings, compensation and rewards, and establishing communities of practice. Other ways to promote knowledge transfer are for the company to have clear organizational goals, provide employees with a certain amount of autonomy, and encourage diversity of views. Search team The software search team could consist of the overall knowledge management team or a subset of this team. The search team should be cross-functional and have representatives from various stakeholders, responsibility levels, and software user groups. The team should select a capable project manager and have members with a good mix of business and technical knowledge. It is recommended that the search team have at least one member with information system experience and that the project manager not be taken from the information systems area. The search team needs a sponsor from upper management as well as strong support from other members of top management. The major responsibilities of the search team are to establish expectations, including problem identification, software requirements, implementation plan, vendor selection process, and budget. The search team needs to agree on business needs, key issues and prioritize requirements prior to the beginning of the vendor selection process. Infrastructure assessment The first step in the information technology (IT) assessment is to examine existing infrastructure and business processes. Three major areas should be examined: 1) IT assets, 2) IT management processes, and 3) IT business performance. Assets should include various software applications, hardware, databases, networks, and business and technical skills of the IT organization. Management processes consist of IT strategic direction setting and execution and review of IT projects. The business performance consists of a spending profile and the business impact of IT projects. A careful examination of these areas would indicate the capability of the existing infrastructure and the ability to implement IT projects. The second step in the IT assessment is to see where technologies and business processes are currently being used as enablers to knowledge processing. Specifically, one needs to address tools that exist to create, share, integrate, and utilize knowledge. A broad range of technologies can be used for knowledge processing, knowledge production, and integration. Examples include content management/document management, collaborative tools, business intelligence, databases and repositories, knowledge directories/categorization, portals, expert search, and data mining. Content management is represented by the policies and technologies that guide and enable companies to contribute, manage, and share their structured and/or unstructured information. Collaborative tools would include skills directories, yellow pages, collaborative work tools i.e. groupware, video conferencing, digital white boards, and electronic forums. Business intelligence includes expert systems, case-based reasoning, intelligent agents (data mining agents, agents, interface agents, mobile agents), neural networks, and fuzzy logic. Databases and repositories include data warehouses, web houses, and knowledge repositories. Knowledge repositories consist of external knowledge such as competitive intelligence, structured internal knowledge such as reports, and informal internal knowledge such as lessons learned. Knowledge repositories should contain rationale for decisions, rationale for rejected decisions, and decision circumstances and assumptions. The third step is to examine whether the existing infrastructure and business processes are optimized for knowledge processing. One has to map existing applications onto the information process grid as shown in Figure 3. Applications do one or more of the (Figure 3) following activities: store information created by the author, manage and search information, share information, and create and discover information. Look for obvious gaps in the knowledge life-cycle 16 and compare the knowledge gaps identified TECH MONITOR l Jan-Feb

4 38 Figure 3: Information process grid Table 1: Sample requirements list Tacit Create Author Store Create Manage Discover Search Share View Explicit Text mining tool requirements Requirement Weight Ability to specify search sources 10 Integrates with company taxonomy DB 7 Saves prior user search criteria 3 Capable of mining flat text, HTML, XML, EDI, PDF files 10 Easy to create complex queries 8 in the knowledge audit. The knowledge life cycle consist of knowledge production (creation and discovery) and knowledge integration (searching, sharing, storing, and managing). It is important to survey the infrastructure to identify what technical capabilities you require. Capabilities might include the following: operating system, databases, protocols, browsers, other KM software, and standards. In addition to the current infrastructure, it is important to consider the projected infrastructure to ensure that the new software has the capability to interface with planned additions. Software requirements and sources After determining the type of KM software needed, the search team must define the software requirements. The search team may interview representatives of various internal organizations to gather needs information. All end-user groups should be included in this process to facilitate both buy-in and requirements definition. Specific requirements could include the following considerations: effectiveness, supportability, user-friendliness, flexibility, growth capability, open interface, quality assurance, functionality, interoperability, cost, and value addition. Other software evaluation factors include the following elements, and addresses the following questions: Leverage l Quality - Is it bug-free or does it have many errors in the programme code? l Efficiency - Does the software use much CPU time, memory capacity, or disk space? l Security - Does it provide control procedures for errors, malfunctions, and improper use? l Connectivity - Is it Web-enabled so it can easily access the Internet, intranets, and extranets? l Language - Is it written in programming language that is familiar to our own software developers? l Documentation - Is the software well documented? l Hardware - Does existing hardware have the features required to best use this software? l User interface - Is the interface easy to understand, navigate, and learn? It is important to clearly articulate what you are trying to achieve and the context of the software use. The team should brainstorm and refine potential requirements to determine the final list of requirements. The next task for the search team is to assign a weight to each requirement. These requirements could be separated into three levels: nice to have, important, and critical. A scale from one to ten (with one being nice to have and ten being critical) will suffice. The requirements and weights should be placed into the requirements document. A sample requirements list is shown in Table 1. There are a number of resources the search team can use to determine possible sources for software. One of the primary resources used by business is information system consultants. Specialized consultants have the advantage of exposure to a variety of products. However, it is important to query the consultants regarding their relationship with any vendors in order to prevent partner-based bias. Another resource is benchmarking partners who may have practical experience implementing the software. Trade literature periodicals such as KM World, CIO, and NW Fusion have articles and ratings on KM software. Finally, for-fee services such as Gartner, Forrester, Delphi Group and Jupiter sell information about software. Recently, questions about the impartiality of these for-fee services have arisen, 17 so information should be confirmed with an outside source. Other sources of potential vendors include employees who have used vendor software, software catalogues, and advertisements in industry publications, colleagues in other companies, and industry associations. It is important that the search team compile a list of potential vendors before sending out a request for information (RFI) or a request for proposal (RFP). This list can then be narrowed by doing initial research to eliminate any software that does not meet critical requirements. RFP and bidders conference Requirements are formalized by listing them in a RFI or RFP document. The RFI 38 TECH MONITOR l Jan-Feb 2004

5 39 is relatively high level. It is an effective preliminary screening device that is intended to eliminate products for consideration. The RFP, on the other hand, is detailed and could add three to four months to the evaluation process. Often the initial screening could be done with the RFI followed by an in-depth comparison of the finalists through the RFP process. The RFP fills an important gap between the initial project definition phase and the implementation phase of the project. It allows one to take the project requirements that have been developed and put them into a form that vendors can use, understand, and respond to. The RFP should include narrative regarding company and situation, facts regarding existing infrastructure, technical requirements, number of users and implementation schedule requirements. In addition, the RFP should include information about the bidding process, the schedule for the selection, contact information, and desired format for the proposal. The RFP should also request detailed information about the performance of the software, functions, features, price, and implementation plan. The RFP is then sent to appropriate vendors, who use it as the basis for preparing a proposal. For larger projects, a bidder s conference is an efficient way to clarify requirements with vendors. All candidates attend this meeting, which ensures that the search team is able to communicate a common message. The following tips are recommended for hosting the bidder s conference: l Invite all bidders to a single meeting; l Schedule for one or two weeks after RFP and scripts are sent out; l Vendors to submit lists of questions beforehand; l Prepared answers are presented to all attendees and time is allotted for further questions; and l After the conference, a clarified RFP is sent out. The purpose of the conference is to ensure that all parties involved clearly understand the expectations, timelines, and guidelines of the selection process. 18 Vendor script and vendor demonstrations In addition to the RFP, the team should create a vendor script. The script communicates the team s desired presentation agenda content and format which enumerates specific demonstration topics that will be discussed. Vendor scripts are a useful tool for guiding vendor demonstrations to ensure consistency and completeness. The vendor script is prepared utilizing the list of weighted requirements. A sample vendor script is shown in Table 2. All vendors receive the same script. The script should include the total time allotted for the demonstration and may include time limits for certain requirements. Vendors are sometimes resistant to the adoption of scripts, but it is important for the search team to maintain a leadership role in the demonstration and insist that vendors follow the script. It is important to note that weights assigned to requirements are not disclosed to vendors. Script items describe specific actions as shown in Table 2. Vendor scripts help the selection team ensure all major requirements are discussed, aids apples to apples comparison, and allows the team to check for vendor understanding of requirements and organizational fit. The quantitative scorecard ratings provide an objective method for evaluation. Vendor demonstrations should be scheduled close enough together to retain memory, but not too many in a day to avoid overload. The vendor schedule should include script time as well as ad hoc discussion time. The search team should rate vendor demonstrations on individual score cards. To ensure accurate evaluation, all individuals rating the software need to be present at each demonstration. A sample scorecard is shown in Table 3. Criteria for selection The selection criteria should be based on RFP response, vendor demonstration scorecard totals, vendor evaluation, software cost and vendor reference checks. The team should evaluate the RFP response by considering how well the proposal meets the specific requirements as outlined in the RFP, such as performance of the software, functions, features, price, and implementation plan. The vendor demonstration scorecards should be tallied on the average of all team member scores multiplied by predetermined score weights. From this a Table 2: Sample vendor script Text mining tool vendor script Item 1 Show how user would select from a list of sources to exclude a particular source 2 Demonstrate the use of a Taxonomy DB to enhance search 3 Show how user could examine a list of prior searches 4 Describe which file formats your product can search 5 Show how a complex query is written Table 3: Sample vendor demonstration scorecard Demonstration scorecard vendor A Requirement Score Ability to specify search sources 4 Integrates with company taxonomy DB 9 Saves prior user search criteria 0 Capable of mining flat text, HTML, XML, EDI, PDF files 5 Easy to create complex queries 7 Notes: ranked preference of vendor offerings can be determined. Software scores should be taken as guidelines, allowing for team discussion. The scorecard provides guidance in regards to which vendors should be included in the vendor evaluation. Vendor evaluations are based on the characteristics of the company, service, products, and personnel. Sample vendor criteria are shown in Table 4. The vendor should have a proven track record, financial stability, commitment and vision, experience in rapid deployment and customization, customer responsiveness and support, and a good understanding of business needs (Table 4). TECH MONITOR l Jan-Feb

6 40 Table 4: Sample vendor evaluation Company Exc: Good Fair Poor Financial strength 4 Facilities 2 Size and capacity 2 Management 3 Labour relations 4 Technical service 1 Support capabilities 1 Product quality 3 Personnel expertise 2 The software costs then should be examined, based on Total Cost of Ownership (TCO). TCO is the lifetime cost of software that includes the initial cost for required hardware, software license and training acquisition, as well as recurring fees for maintenance and upgrades. Any paid consulting time required for implementation should also be considered. The balance of initial costs versus recurring fees has a strong influence on the financial profile of the purchase, which could impact cash flow of the company. Vendors should provide several references from previous customers. Sample questions to ask reference companies are as follows: l What type of work did the vendor do for you? l Would you use them again? How? l What problems did you have? How fast did they respond to problems and was the response satisfactory? Ask about a specific problem and get details. l Did the vendor meet your goals for the project, time-frames and costs? If they missed any objectives, why? l What was the most difficult part of working with the vendor? l What advice would you give on how to work effectively with the vendor? l Who was the consultant assigned to your project? Who did you particularly enjoy working with? l How were changes in the project scope handled? The five elements used to narrow the search to two or three vendors are: l RFI/RFP response; l Vendor demonstration scores; l Vendor evaluation; l Software cost; and l Vendor reference checks. These five elements will provide the selection team with the information necessary to negotiate and make the final decision. Making the final decision The first step in the decision process is to negotiate with the two to three vendors that emerged from the evaluation selection process. Purchasing, legal, IT, finance and end-user organizations should be included as representatives on the negotiation team. Each team member should know the vendor s pricing model and pricing structure before vendor negotiations, and allocate sufficient time for the negotiation process. The team should also have a solid understanding of the vendor s market position and reputation. Some of the factors to consider in the negotiation process include vendor s strategic objectives (revenue growth vs. market share), salesperson motivation, payment schemes, discounting, policies on maintenance and upgrades. 19 Once the contract is signed, the company should focus on best practices for managing the contract by assigning a manager to oversee the vendor relationship. It is recommended that software selection teams contact peers and other professional groups to learn about the experiences of others. To help demonstrate the overall software process, a sample KM case study is given below. Sample KM software case study A case study of a company selecting and implementing software will be used to illustrate how one company has used some of the elements of the process discussed in this paper. This example focuses on the design and implementation of a knowledge directory for Thomson Legal & Regulatory. 20 The first step in the process was to establish the business case (need) for the software. Some of their common business problems were: 1) finding others who have done work with a client, 2) finding the right people to assemble a team for a new client, and 3) how to locate internal sources of knowledge. Knowledge locator systems were important to them strategically since they were facing new competition; online products were replacing traditional products, and the company had multiple business units around the globe. They needed to leverage employee knowledge, which leads to quicker problem resolution, provides alternative design or testing methods, leads to discovery of new applications, and reduces costs. They needed to overcome the cultural issues that no informal communication channels were established and had no history of collaboration. Their overall knowledge strategy was to identify technology that enable knowledge sharing, collaborate knowledge processes, and provide resources, information, and communication about knowledge sharing events and activities. The specific objectives of the knowledge directory project were to enable and encourage knowledge sharing at every level of the organization by: l Allowing individual employees to find others who can provide information; l Enabling work groups and teams to identify, locate and contact colleagues to bring additional expertise to bear on their projects; and l Encouraging business units to share best practices and lessons learned. Before one begins to select software it is important to establish the business need by identifying problems, aligning business strategy with knowledge strategy and defining the specific objectives of the KM project. Specific technology requirements were established for the knowledge 40 TECH MONITOR l Jan-Feb 2004

7 41 directory project. Examples of some of these software requirements included: web-enabled and web-accessible, no software plug-ins or special downloads, multiple search options, consistent with existing infrastructure and, which can be customized easily. Specific vendor requirements included: local vendors who were experienced, to save time and travel costs and to build a solid relationship. With a clear understanding of their software requirements and information systems infrastructure, they were ready to identify potential sources of software. They identified potential vendors through literature searches in books, magazines and websites, and through trade shows and conferences. To narrow down the vendor selection they conducted interviews and asked for references from the vendors, to check on their capabilities, and also had them make presentations. The overall knowledge directory project was accomplished at a cost of $ 100,000 and completed in 12 months, with very limited resources (1 FTE). This example illustrates that with proper planning and partnership and with the right vendor, knowledge management software projects could be successful. To make the project successful they provided information to various stakeholders to facilitate change management and a strong communication strategy. They created an organization-wide awareness, promoted acceptance, and advocacy for the knowledge directory by publicizing actual user stories detailing knowledge successes. Some of their lessons learned include: partner with a business but don t expect them to do the work, communicate project goals but don t promise specific results, work in phases by revising, refining, and re-thinking as you go, keep cost low if you hope to prove any ROI, and give people choices and listen to their concerns and ideas. Conclusion The process of selecting KM software for SMEs can be an overwhelming task due to the number of vendors. 21 Past experience indicates that a large percentage of software procurements do not meet requirements, and exceed budget expectations. Often vendor relationships are strained because many vendors back off from their original commitments. The strategic implications and possible pitfalls of selecting the wrong software can be too great for SMBs to ignore. SMBs should follow a systematic process for software selection to better the changes for success. The software selection process as discussed in this paper consists of the following steps: 1. Establish a business need; 2. Form a search team; 3. Perform infrastructure assessment; 4. Determine software requirements and sources; 5. Prepare a request for a proposal and host a bidders' conference; 6. Create vendor scripts and view vendor demonstrations; 7. Establish criteria for the selection process; and 8. Make a final selection. A case study for selecting software illustrated that with proper planning, business needs, knowledge objectives, technology and vendor requirements, knowledge management software projects can be successful. Software itself is an enabler of knowledge management and needs to be coupled with organizational mechanisms for effective knowledge management implementation. References 1. Anonymous, 2001 "Knowledge Man agement: Executive Brief. emarketer", available at: 2. Liao, 2003, "Knowledge Management Technologies and Applications", Literature Review, , Expert Systems with Applications, 25, pp Awad E. M. & Ghaziri H. M., 2003, Knowledge Management, Prentice Hall, New Jersey. 4. Stemke J. & Rumizen M., 2001, "Assessing KM Technology Choices", Knowledge Management Review, November. 5. Marwick A., 2001, "Knowledge Management Technology", IBM Systems Journal, 40 (4), pp Berinato S., 2002, "How to Cut Through the Vendor Hype", CIO Magazine, January. 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